As innovation enthusiasts gather across New Zealand for Techweek, our Hatch GM reflects on how combining startup sensibility and corporate cultures is key to developing award-winning financial technology.
Innovation is empowering financial autonomy
One year ago, Kiwi Wealth launched an in-house innovation lab. We were given a few challenges, one of which was to transform the way Kiwis self-direct their investments. We gave each team the autonomy to behave much like a startup. One of the outcomes of the lab was the development and launch of Hatch, a digital platform that gives every Kiwi the opportunity to be a world-class investor.
Since we launched in September 2018 Kiwis have invested more than $13M with Hatch and we recently picked up a Canstar Innovation Excellence Award.
How’d we get here so fast?
There’s a common misconception that in-house innovation is easy. Just add beanbags, sticky notes and presto! The reality is that solving problems in a new way requires genuinely open and creative thinking. It’s a hard and uncomfortable process that forces even its biggest advocates to question their limits.
But innovation is even more vital than it is hard. And the reason is simple: if you’re not developing new ideas, products, and approaches to delivering better and cheaper solutions, you will become irrelevant. Thanks to the digital economy, companies can no longer rely on their existing offers and business models for survival.
Corporate innovation: a mixed bag
Big companies can be bad at innovation because they’re designed to be bad at it. The company life cycle may begin with innovation, but it moves swiftly towards efficiency. Corporates put a laser-focus on increasing profits and put in rigid organisational structures and processes to get there. It’s a strategy that has worked well for decades. The problem is, it’s the exact opposite of what is needed to future-proof business in 2019.
Steps of a successful innovation process
There’s no one size fits all answer to retrofitting innovation into a company, it’s a bespoke beast. But some principles can smooth the way:1. Using proven startup principles
Corporates have a track record of executing on product ideas within a vacuum. They build the thing they think they need before they test any assumptions, or even really understand the problem it solves.
Startups do the opposite. They start with the problem and validate (or invalidate) an opportunity. They spend countless hours with real people, determining their behaviours, frustrations and areas of friction. And they do all this before taking one step towards creating a solution.
2. Having a robust business model
Innovation isn’t built on a foundation of “cool ideas”. Tech companies know that even the best idea will fail without a robust business model behind it. It’s no longer enough to assume that if you build it, they will come; now you must determine the best business model to get people over the line. Subscription, freemium and pay-per-use models have been used to disrupt industries in ways we’d never have dreamed of 10 years ago. Real innovation runs deeper than just the product you build.
3. Using the right tools for execution
The tools and processes that enjoy a cult-like startup following, really do deserve the comical level of adoration they receive. Agile, Trello, Slack and Google Analytics may not be the key to success, but their ability to facilitate execution is. As is the team. Cross-functional and co-location aren’t buzzwords, they are essential characteristics of a team that can take an innovative idea and turn it into a success.
4. Creating the right culture
Creating a culture that celebrates innovation is important. You need to foster an attitude of dissatisfaction with the status quo and a drive to revolutionise, not iterate, on the way things are done. Embrace failure, because if you’re doing innovation correctly, you will fail. And encourage all these behaviours actively. It’s the cost of experimenting, and it’s how you and your team will grow.
5. Committing to the cause
Innovation tends to make corporates slightly uncomfortable. It’s not an easy task to work alongside business as usual and delivers on a future vision. It needs a commitment from the top down to create and empower teams with different goals, functions, and metrics, and give them the freedom they need to succeed or fail.
It’s a brave new world out there, take the time during Techweek 2019 to reflect on what innovation looks like for you: to be bold and face into a very different future.